NEW
Font size
WorksheetsTVM
Total questions: 25
Worksheet time: 2hrs 11mins
The future or present value of an amount depends upon:
the interest rate.
the number of periods.
number of times per year compounding occurs.
all of the above.
In which case will an investor receive the most interest:
10%, compounded annually.
10%, compounded monthly.
10%, compounded continuously.
10%, compounded daily.
Annuities:
are a stream of equal payments at unequal time intervals.
are a stream of equal payments at equal time intervals.
are a stream of equal payments that continue forever.
none of the above.
The basic rule of the time value of money is:
investments will always be worth more tomorrow than they are today
it’s always wiser to save a dollar for tomorrow than to spend it today
a dollar in hand today is worth more than a dollar promised at some time in the future
all of the above express an aspect of the basic rule of time value of money
When comparing an annuity due with an ordinary annuity with the same payment and duration, the annuity due will always have a _______ present value and will always have a _______ future value.
higher; higher
higher; lower
lower, higher
lower, lower
A perpetuity:
has infinite value because the payments continue forever
can be valued (PV) if the payment amount and interest rate are known
don’t exist in the financial world
none of the above are true
The present value of a future amount will be higher with a higher interest rate.
True
False
Lenders prefer less frequent compounding; borrowers prefer more frequent compounding.
True
False
A perpetuity may be thought of as an annuity that continues forever.
True
False
The future value of a perpetuity makes no sense because the payments never end.
True
False
Tony Stark memiliki uang Rp. 2000.000 yang ditabung dibank dengan bunga 8% pertahun selama 10 tahun, berapakah akumulasi bunga yang diterima Tony Stark?
1.600.000
16.000.000
160.000
16.000
Tony Stark memiliki uang Rp. 2000.000 yang ditabung dibank dengan bunga 8% pertahun selama 10 tahun, berapakah Future Value uang milik Tony Stark?
360.000
3600.000
36.000.000
36.0000
Wonder Woman memiliki uang Rp. 600.000 yang ditabung dibank dengan bunga 7% pertahun selama 8 tahun, berapakah akumulasi bunga yang diterima wonder woman?
3360.000
33.600.000
336.000
33.600
Wonder Woman memiliki uang Rp. 600.000 yang ditabung dibank dengan bunga 7% pertahun selama 8 tahun, berapakah Future Value uang milik wonder woman?
93.600.000
93.600
9.360.000
936.0000
If you have THB 10,000 today and the interest rate is 3%, in 10 years, you will have:
7,441
13,000
13,439
85,302
At an annual interest rate of 6%, the present value of THB 5,000 received in 5 years is closest to:
3,736
3,846
6,691
6,500
At an annual interest rate of 25%, the present value of GBP 500 received every year forever, but starting in 3 years (i.e. the first cash flow is at t=2) is closest to:
256
1024
1280
2000
You recently won a competition, and the organizer has the following menu of prizes for you to choose from. You can only choose one option. If the discount rate is 12%, which option would you choose?
THB 100,000 today (t=0)
THB 180,000 in 5 years (t=5)
THB 11,400 forever starting from the end of this year (t=1)
THB 18,000 every year for 10 years starting at the end of this year (t=1)
You recently won a competition, and the organizer has the following menu of prizes for you to choose from. You can only choose one option. If the discount rate is 12%, which option would you choose?
THB 100,000 today (t=0)
THB 180,000 in 5 years (t=5)
THB 11,400 forever starting from the end of this year (t=1)
THB 18,000 every year for 10 years starting at the end of this year (t=1)
Suppose you have the following cash flow:
Year 0: -1.00
Year 1: +0.25
Year 2: +0.45
Year 3: +0.65
If the discount rate is 10%, then NPV of the cash flow is:
-0.09
0.09
0.35
1.09
Suppose you have the following cash flow:
Year 0: -1.00
Year 1: +0.25
Year 2: +0.45
Year 3: +0.65
If the discount rate is 10%, what can you say about the IRR of the cash flow?
IRR < 10%
IRR = 8.8%
IRR > 10%
IRR = 35%
PTTEP is considering purchasing an oil well that will generate USD 100 million in cash flow next year (t=1). However, with falling oil price, you expect the cash flow to decline by 2% per year. If the discount rate is 8% and the asking price for the oil well is USD 1,000 million, what is the NPV of the oil well?
USD -250 million
USD 0 million
USD 250 million
USD 667 million
less than 100
If you save 2 dollars of your allowance per week for 7 weeks. How much will you have saved?
$9
$18
$14
$5
Angela and Mike both want a piece of candy. Angela has $1.50 and Mike has $1.28. If they combine their money to get the candy how much do they have?
$o.22
$2.20
$3.78
$2.78
